Telecom Stocks Outlook
Likely to track headline indices next week
This story was originally published at 21:34 IST on 31 October 2024
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MUMBAI - Shares of telecommunication companies are likely to track the headline indices next week, which are expected to consolidate next week. Headline indices fell around 6% in October after a strong rally, and analysts anticipate further declines. However, the fall is likely to be limited, they said. Most telecom stocks gained this week as the indices consolidated.
Key trigger for the telecom companies is now revenue ramp-up, following the long-awaited tariff hike taken at the end of June. The impact of these tariff hikes is expected to be seen in revenue over the next few quarters.
Shares of Bharti Airtel, which reported its Jul-Sept earnings earlier this week, fell over 3% this week. The stock is expected to fall an additional 6-7% over the next three to six months. The company's recent tariff hike is affecting its customer base, analysts said. As per an analyst, reaching an average revenue per user of INR 300 will be challenging for Bharti Airtel. The company's average revenue per user increased to INR 233 in Jul-Sept from INR 211 in the previous quarter.
Despite gaining over 6% Thursday, analysts are not positive on Vodafone Idea as the company's fundamentals are weak. The loss of market also weighs on the stock. According to a report by Moneycontrol, the Department of Telecom plans to waive bank guarantees that telecom companies owe for purchasing spectrum till 2022. This decision is likely to benefit Vodafone Idea, which needs to secure bank guarantees totaling INR 270 billion in the coming months.
TOP HEADLINES
* Analyst Concall: Bharti Airtel mobile customer base down on tariff hike
* RailTel Corp Jul-Sept net profit rises 49.3% QoQ to INR 726.4 million
* CARE assigns AAA rating to Bharti Airtel's long-term bank facility
* Earnings Review: Bharti Airtel net profit falls 14% on qtr on one-time cost
* Bharti Airtel appoints Shashwat Sharma as MD, CEO effective Jan 1, 2026
Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharti Airtel | 1,612.60 | (-)3.20 | 1654.50 | 1581.20 |
| Mahanagar Telephone Nigam | 48.59 | 3.60 | 50.20 | 47.60 |
| Reliance Industries | 1332.05 | 0.30 | 1350.60 | 1316.90 |
| Tata Communications | 1774.65 | (-)0.20 | 1816.30 | 1726.40 |
| Tata Teleservices Maharashtra | 73.45 | 6.20 | 75.10 | 71.00 |
| Vodafone Idea | 8.12 | 6.00 | 8.50 | 7.50 |
| Nifty 50 | 24205.35 | 0.10 | 24450.00 | 24050.30 |
| S&P BSE Sensex | 79389.06 | (-)0.00 | 80331.00 | 78817.00 |
End
Reported by Anjali Singh
Edited by Akul Nishant Akhoury
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